Sunday, 6 July 2014

The Economics of Climate Change

If there's one reason why a global climate deal hasn't been reached yet, it's economics.

Developing nations want to continue developing. Developed nations don't want to be lose competitive advantage.

Poor nations want support for mitigation and adaptation. Rich nations don't want to spend too much on supporting them.

And, underlying it all, everyone knows there'll be a cost to cutting carbon emissions

But is that cost too much?

Well, climate deniers think so. They think it'll mean jobs losses, massive costs to governments and, as a consequence, tax increases for all of us. So it's a major part of their argument against doing anything about climate change.

But, as always, the climate deniers only see what they want to.

Doing nothing to curb emissions will mean global temperatures will rise by around 4C by the end of the century. That is 2 degrees more than what is generally agreed to be the maximum we can safely risk.

So far we've only experienced a 0.8C rise and yet we are already getting an increase in freak weather events: Super-storms; record breaking droughts and temperatures; and flooding to name just a few.

As the global temperature rises, we'll get more and more of the same, plus increasing problems from rising sea levels.

So we can look forward to:
  • Failed crops across huge areas, leading to volatile food prices.
  • Widespread flooding on a regular basis, inflating our insurance costs. Some people will find their properties to be un-insurable.
  • Towns, cities, and infrastructure on coasts or rivers will need to be defended against flooding, meaning more tax for us all. 
  • The health implications of heatwaves and the migration of diseases into formerly cooler climes will be enormous. That's more tax or more expensive health insurance for us all.
  • Businesses will be hit hard by the flooding, heatwaves, increased insurance and tax, and the cost of climate adaptation. Some will go under, many will cut jobs to keep their costs down.
  • We'll all have to pay more for water as it becomes scarcer.
  • ....and much more besides.
In short, business-as-usual, will mean anything but. The costs of doing nothing will far out-weigh those of actually dealing with climate change in the first place.